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Highlights
COST's adjusted operating profit increased 3.1% to £16.8 million, with margin rising to 3.2%.
Forward work expanded to £5.6 billion, more than four times FY24 revenue.
Interim dividend raised to 1.0p, supported by a £10 million share buyback programme.
Costain Group plc (LSE:COST) has released its financial results for the six months ended 30 June 2025 (“H1 25”), reporting higher operating profit, improved margins, and a record forward work pipeline, while reaffirming confidence in delivering its full-year 2025 expectations.
Financial Performance
Revenue for H1 25 was £525.4 million, down from £639.3 million in H1 24. The reduction was attributed to the planned completion of several road projects and a rephased schedule for HS2. This was partially offset by growth in Natural Resources.
Adjusted operating profit rose 3.1% to £16.8 million (H1 24: £16.3 million), supported by improved quality of contracts and delivery execution. Adjusted operating margin increased by 70 basis points to 3.2%, compared with 2.5% in the prior year. Costain reaffirmed its target to achieve an adjusted operating margin run-rate of 4.5% during FY 25.
Reported operating profit rose 18% to £16.4 million (H1 24: £13.9 million), reflecting a reduction in adjusting items following the completion of the Group’s Transformation programme.
Earnings per share (EPS) were broadly stable, with adjusted EPS at 5.5p (H1 24: 5.6p), as higher operating profit was offset by lower net finance income. Reported EPS increased to 5.4p, compared with 5.0p a year earlier.
Forward Work and Balance Sheet
Costain’s high-quality forward work position expanded to £5.6 billion, up from £5.4 billion at FY 24 and £4.3 billion at H1 24. This level represents more than four times the Group’s FY 24 revenue and reflects demand across its core markets. Bidding activity also remained high.
The Group reported net cash of £144.9 million at 30 June 2025 (FY 24: £158.5 million; H1 24: £166.0 million). Net cash at year-end is expected to be approximately £170 million.
Shareholder Returns
Shareholder distributions were enhanced, with the interim dividend increasing to 1.0p (H1 24: 0.4p). The adjustment reflects the normalisation of the interim-to-final dividend split. Additionally, the Group launched a further £10 million share buyback programme in H1 25.
Outlook
Looking ahead, Costain noted the positive impact of the UK Government’s recent 10-year Infrastructure Strategy and Infrastructure Pipeline, alongside significant regulatory investment in water, energy, and aviation. The Group expects continued momentum across its chosen markets of Transport, Water, Energy, and Defence and Nuclear Energy.
While recognising the potential impact of macro-economic and geopolitical factors on government spending decisions, Costain reaffirmed its confidence in delivering FY 25 and FY 26 expectations. Management highlighted the expectation of a step change in performance from FY 27 onwards.
